Correlation Between Goldman Sachs and Moodys
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Moodys at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Goldman Sachs and Moodys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Goldman Sachs and Moodys, you can compare the effects of market volatilities on Goldman Sachs and Moodys and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Goldman Sachs with a short position of Moodys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Moodys.
Diversification Opportunities for Goldman Sachs and Moodys
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Moodys is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moodys and Goldman Sachs is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Goldman Sachs are associated (or correlated) with Moodys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moodys has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Moodys go up and down completely randomly.
Pair Corralation between Goldman Sachs and Moodys
Assuming the 90 days trading horizon The Goldman Sachs is expected to generate 1.53 times more return on investment than Moodys. However, Goldman Sachs is 1.53 times more volatile than Moodys. It trades about 0.28 of its potential returns per unit of risk. Moodys is currently generating about 0.24 per unit of risk. If you would invest 47,300 in The Goldman Sachs on September 3, 2024 and sell it today you would earn a total of 10,630 from holding The Goldman Sachs or generate 22.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Goldman Sachs vs. Moodys
Performance |
| Timeline |
| Goldman Sachs |
| Moodys |
Goldman Sachs and Moodys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Moodys
The main advantage of trading using opposite Goldman Sachs and Moodys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Moodys can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Moodys will offset losses from the drop in Moodys' long position.| Goldman Sachs vs. Fevertree Drinks PLC | Goldman Sachs vs. Seven West Media | Goldman Sachs vs. MOLSON RS BEVERAGE | Goldman Sachs vs. Ubisoft Entertainment SA |
| Moodys vs. RELIANCE STEEL AL | Moodys vs. ALGOMA STEEL GROUP | Moodys vs. Reliance Steel Aluminum | Moodys vs. Magnachip Semiconductor |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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